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Expert: Economic shocks connected to pandemic lead to uncertainty

Donna Ginther
Posted at 5:55 PM, May 19, 2022
and last updated 2022-05-19 19:32:41-04

KANSAS CITY, Mo.  — Experts on economics are saying uncertainty is the rule of the day when it comes to the current economy.

Donna Ginther, a professor of economics at the University of Kansas, said multiple distortions from the COVID-19 pandemic are working their way through different sectors of the economy.

"I would say the economic shocks that we are experiencing are unprecedented," Ginther said. "we've never seen anything like this in our lifetime, we didn't see this with the flu pandemic 100 years ago."

Target reported Wednesday that its profit tumbled 52% compared to the same period in 2021.

Ginther said Target, along with Walmart who also reported its profit tumbled 17%, may start increasing their prices for shoppers soon if their own costs for gasoline remain high.

For Kansas City, Missouri, resident Diane Capps, the high prices for food means a dreaded trip to the grocery store.

"It's really discouraging, and even though I am low-income, I know there are a lot of people that are not as well off as I am, and I am really concerned about them and the homeless population," Capps said.

The chaos causes concern for couples like Evie and Bob Quarles.

"Not so much as a business owner, but as individuals at our time in life we'd like to hang onto what we put aside to live on as we grow older, and it's eroding," Bob Quarles said.

For Capps, the uncertainty means choosing to spend her money only where necessary.

"We stay at home a lot and watch TV and we just don't spend much on entertainment," Capps said.

Ginther said while the Fed is trying to stop inflation, the monetary policy lag means inflation will continue for the next year or so. She recommends consumers purchase big ticket items sooner rather than later.